Blog by an experienced Divorce and Family Law Attorney to educate people with Family Law and Divorce issues, answering questions and explaining complicated matters in a straightforward and understandable way. This blog is a Newsletter, designed for general information only. The information presented in this blog is not, is not intended to be, and shall not be construed to constitute legal advice, nor to create an attorney-client relationship.

Thursday, October 29, 2009

Certified Family Law Specialist Donald F. Conviser, of Warner Center Law Offices, a Los Angeles Divorce Lawyer in Woodland Hills California, serving divorce and family law clients in Los Angeles County and Ventura County for over 35 years, offering a free confidential consultation regarding your divorce or family law situation, reports on Marriage of KNOWLES, an important Child Support Modification case decided on October 6, 2009 which supports father's rights.

Dad had remarried after the divorce.

Mom sought a modification upwards, of Dad's Child Support, based on (among other things) successful real estate investments and a brokerage account that Dad and his new wife had.

The trial Judge imputed a rate of return on the real estate investments and brokerage account, and used those full figures in determining Dad's income in calculating his Child Support obligation, stating that although those assets are community property, the court won't reduce the value of the investment income by 50% as a result of the new wife's half ownership, stating that no law had been presented that stands for the proposition that passive community property income, such as capital gains, interest or dividends, should be divided with a new spouse for support purposes, making half of it unavailable for Child Support, further stating that public policy points in the opposite direction.

Prior to 1994, trial courts had the authority and discretion to consider a new spouse's income when setting a Child Support award, but Family Code Section 4057.5 now expressly prohibits courts from considering a subsequent spouse's income when determining or modifying Child Support, except in very limited circumstances. In Marriage of WOOD, an earlier case where the Mom was unemployed and claimed to be looking for work, the trial court found that it would be unjust to apply the child support guidelines because of the "phenomenal income" of her wealthy subsequent spouse.

In Marriage of KNOWLES, the trial Judge considered all the community investment income, including Dad's new wife's 1/2 when calculating Dad's child support obligation, but made no finding of extreme or severe hardship of Mom.

Family Code Section 751 provides that income generated from community property is community income, and spouses have an equal, individed interest in that income.

Contrary to the trial Judge's order and findings, the appellate court, in Marriage of KNOWLES, held that Family Code Section 4075.5 [is the law that] prohibits use of the community income attributable to the subsequent spouse, whether the income is earned or a return on investments, in calculating a Child Support obligation, and that the public policy of the state of California concerning the use of a subsequent spouse's income in calculating a child support obligation is found in Family Code Section 4075.5.

Note that Marriage of KNOWLES involved community investments of Dad and his new wife and limited the trial court's calculation of Dad's income from those investments to 1/2 of the income from those community investments. However, pursuant to Family Code Section 4075.5, the new wife's employment income and her separate property income cannot be considered in calculating Dad's child support obligation. That distinction should be borne in mind by Dad's attorney in cases where Mom is seeking modification of Child Support.